Flooding is a risk to all residential properties, even if you live in an inland area. While you might assume that your home insurance will cover basement flood damage, most policies exclude coverage for at least some types of flooding, including when it’s caused by a natural disaster. Fortunately, many home insurance companies sell standalone policies and endorsements that can fill gaps in your homeowners insurance and provide coverage for various kinds of flooding, including basement floods.
When does homeowners insurance cover basement flooding?
Basement flooding can be caused by a number of things. Your home insurance policy might cover some of these situations, but not others. It’s important to review your home insurance policy to see what specific perils are covered, and which ones are excluded. Here is a list of common scenarios that can cause basement flooding, and are typically covered by homeowners insurance.
If your basement floods because a pipe bursts during a freeze, or the pipe to your washing machine breaks, the resulting damage will most likely be covered by your policy. However, there are a few caveats to keep in mind. You need to be living in the home and keeping it at a minimum temperature for your claim to be eligible. Also, if your insurer discovers that you have not kept up with maintenance on your pipes, your claim may be denied. In general, the resulting water damage from a burst pipe will be covered, but not the cost to replace or repair the pipe itself. That is considered a maintenance cost, which you are responsible for as the homeowner.
Let’s say your water heater springs a leak and you don’t discover the flood damage in your basement until hours later. Again, you would typically be covered by your home insurance policy unless the heater turns out to be poorly maintained and cared for. There may even be questions about your coverage if the heater is very old and its age is the reason it broke. The same rules hold true for a washer, refrigerator or other basement appliances. It pays to practice preventative maintenance by making sure all appliances are working properly and kept clean.
If your basement flood is the result of a structure in the basement that overflows, like a sink or tub, you will likely be covered as long as the overflow was sudden and accidental. However, if your insurer can show that the flood was the result of a continuing maintenance problem, your claim could be denied. So, for example, if your toilet habitually overflows because of a blockage that you haven’t fixed, you may not receive a payout.
When does homeowners insurance not cover basement flooding?
There are some times when standard home insurance policies won’t cover water damage to a basement, some of which may be surprising. However, you can usually add an endorsement to your policy that offers additional coverage, or purchase a special flood insurance policy if flood damage is likely in your area.
Flooding from a storm
If your home is located in a flood zone, your home insurance policy is unlikely to cover basement flood damage after a storm. If you live in a flood zone or have repeated problems with flooding from storms, you will want to consider flood insurance, which is usually purchased through the National Flood Insurance Program (NFIP).
Most insurers will sell you an NFIP policy (although you may be able to purchase private flood insurance), so ask your agent if you think you need this type of coverage. If you purchase a home in a flood zone, your mortgage holder may require you to carry a flood policy.
Sump pump backups
Flooding caused by a sump pump that stops working or malfunctions is not covered by regular HO-3 policies. If you have a working sump pump in your basement, it’s a good idea to consider adding an endorsement to your policy that will cover this sort of mishap. Almost all homeowners insurance companies offer this coverage for an additional charge, although it is likely to pay for itself after a single claim.
This one is a little tricky. Say there is a backup in your basement caused by your washing machine or another appliance. In that case, you will likely be covered, as noted above. However, if the flooding is the result of an external sewer backing up, involving outside pipes that may not even be on your property, it typically will not be covered.
This is another area where homeowners insurance companies offer an additional endorsement to add coverage to your policy. Since sewer backups can be very expensive, it’s a good type of coverage to consider adding to your policy. Typically, this coverage is purchased with the same endorsement that covers sump pump backups.
If you have problems from occasional or chronic water seepage into your basement, your policy will probably not cover it. Seepage may be caused by building a home on top of a high water table or can be the result of an older home with a cracked foundation. In most cases, your insurer will consider this a maintenance problem and will not likely pay the claim.
If your flood is caused by anything related to the lack of maintenance of your appliances, pipes or other items in your home, you will probably not be covered. In other words, if your insurer can prove that you were negligent in caring for your home and its belongings, and that your lack of care caused the flood, you would be out of luck.
Coverage options to consider for basement flooding
If it seems like there are multiple circumstances that your policy won’t cover, don’t despair. Although additional coverage does have a cost, it is possible to carry enough insurance to financially protect your home and personal property against most perils that leave water damage. Here are the most common ways to augment your insurance.
- Flood insurance: As we mentioned, flood insurance comes as a separate policy, usually through the NFIP. If your home is in a flood zone or you have repeated problems with flooding, it’s an essential element to add to your existing coverage.
- Water backup coverage: This is an optional coverage that can be added to your primary homeowners policy. It is designed to cover you for water damage caused by a drain or sump pump backup.
- Service line coverage: Service line coverage is an endorsement that covers utility pipes, like water and sewer lines, if they get damaged in a covered peril. This endorsement can be beneficial, as damage to utility lines can cause flooding in and around your home.
- Contents replacement cost coverage: If you store personal items in your basement, consider adding a contents replacement cost coverage endorsement to your home insurance policy. It covers your personal belongings at their replacement cost value (without depreciation), which means you can replace the items after a claim by buying a newer version.